Narrative: a. 1. B.

The State Board's policy DDEC-WIOA-02-2021, Public Policy and Requirements for the Initial and Subsequent designation of local areas under WIOA, establishes the process for considering the request of the initial designation of local areas for the administration of the funds allocated under WIOA. Additionally, the guidance establishes the directives that will govern the process of evaluation of an application for the subsequent designation as local area. Finally, it also establishes the circumstances and criteria under which the State Board may consider an application for re-designation of local areas that belong to a region of economic development or that seek designation as a single local area.

Under WIOA, the State Board has the power to recommend the designation of an entity as a local area. The State Board advises the Governor in matters relating to the workforce investment system, including those related to section 106 of WIOA, as well as sections 20 CFR 679.200 to 679.290 of the proposed rule.

WIOA conceives a system centered on the customer, comprising both job seekers and employers, capable of anticipating and responding to the needs of regional economies. This requires that local boards and the Chief Elected Officials design and manage a regional system by aligning their services and policies with regional needs and devising support strategies for the provision of services adapted to the demands of the economy.

The Governor, in consultation with the State Board, the Chief Elected Officials and the Local Boards will designate local areas as a condition for receiving the funds allocated to the Government of Puerto Rico under Title I of WIOA. In accordance with OE-2014-64, the PRDEDC is WIOA's Title 1 designated grantee, as well as the designated unit to provide administrative and operational support to the State Board.

The state regulations are being issued in compliance with sections 3 and 106 of WIOA, Act 171-2014, which transferred the WDP to the PRDEDC, and the Governor's EO-2014-64 that designated the PRDEDC as grantee, administrator and monitor of WIOA funds allocated to the State and established the State Board.

The State Board Administrative Letter WIOA-02-2021, also enacts public policy to guide the local area re-designation process. In summary, the transition process from a local area designated previously, to be initially designated as a local area under WIOA can occur using one of two methods:

• Automatic Designation. Under section 106(b)(2) of WIOA, the Governor must approve an application from the previously designated area for the initial designation under WIOA, provided there has not been a change in the composition of the local area; and for the 2 program years prior the local area "performed successfully", and complied with the criteria pertaining "sustained fiscal integrity".
• Discretionary Designation. After recommendation of the State Board, in accordance with section 106(b)(4) of WIOA, the Governor might approve an application of any unit of general local government, including a combination of those units, for its designation as local area under WIOA, if the State Board recommends and determines that the unit or units share a common labor market; share a same area of economic development; and have federal and non-federal resources, including education and training institutions appropriated for delivery service for the labor force. 

At any time, the Governor might review the performance and outcomes of a local area to assess if it meets the requirements for its subsequent designation.

Puerto Rico currently has five regions and fifteen local labor development areas. 

The Bureau of the Census uses, among other data, Place of Workflows to support delineation of Metropolitan and Micropolitan Statistical Areas for OMB.  Metro and Micro areas, commonly used geographical areas used by the Bureau, are made up of a county with a large population nucleus and adjacent counties that have a high degree of integration with that nucleus.

Similarly, the Puerto Rico WIOA State Office has used Place of Workflows to propose to define geographical labor markets, by determining the integration of places of residence with the main areas of work in a region. Municipalities were grouped based on the municipal interrelationship between the place of work and place of residence of workers. Municipality-to-municipality home-to-work flows area was based on 5- year ACS. The resulting regions may be considered labor market areas. Implicitly home-to-work flows consider the size and diversity of a center of economic activity, driving distances, and psychological and geographic barriers.  The proposed regions conform quite well with traditional areas of economic activity consisting of a central place -sometimes more than one- of economic activity and smaller adjoining municipalities. As such, they provide a rational basis to conduct regional planning. All local areas are within a specific region. Adjustments were made to account for the supra-regional pull of the certain municipalities of the San Juan Metropolitan Area, mainly the municipalities of San Juan, Bayamon, Carolina, and Guaynabo avoid defining an excessively large labor market area. The current regions and the local areas are listed in the table below:

 Local and Regional Areas